When you set up your core VM ensure 2 nics, the first set up as NAT, and the second on the Internal network provided by the VM.Then set up a 2nd VM for an MD with no HD and one nic on the Internal network. I don't know what you use for running your VMs but you'll need to specify this MD boots from the Network.

hmm, issue there with plymouth not wanting to upgrade. Something to try, edit the sources.list file on your MD, prior to upgrade, and comment out the /usr/pluto/deb-cache line. The 1004 packages in the deb-cache could be interfering with upgrades. Let us know if this fixes things, we may have to wipe the deb-cache prior to upgrading.